When faced with this decision there are three main factors you should consider:
Life expectancy. Consider the age of your equipment, an 8 year old or more air conditioner or a 10 to 15+ year old furnace (or heat pump) is nearing the end of its life expectancy. On older systems parts are sometimes discontinued and can be much more expensive, if not completely unavailable. (Note: You can add at least four years onto this number if you’ve consistently had it professionally maintained during this time.)
Efficiency. Even if you completely restore an aging unit (which is expensive to do!), you will still only have the efficiency that it was rated for when it was manufactured, at best. In a lot of cases, installing a new heating system can pay for itself in energy savings within a relatively short period of time.
Current condition. Take into account the quality of your current unit, number of breakdowns you’ve experienced, and how often your unit has been maintained. If you have not maintained your unit and breakdowns are frequent, replacement should be a serious consideration. In this situation, no matter what the skill of the installer or service technician, there is little that can be done except restore the unit.